Five months after the Indiana state legislature passed a funding bill for a Chicago Bears stadium that amounted to “What if we built an NFL stadium construction plan entirely out of handwaves?“, the Chicago Tribune’s Robert McCoppin has taken a look at exactly who would be paying for what under the deal. Better yet, he asked two public financing experts — University of Colorado Denver economist Geoff Propheter, who should need no introduction here, and University of Illinois Chicago Government Finance Research Center director Deborah Carroll — to go over the figures and see what’s what.
The myriad tax packages approved by Indiana for a Bears stadium would include:
- Between $12 million and $18 million a year from a 1% food and beverage tax surcharge in Lake and Porter counties (assuming Porter County goes for paying toward a stadium that’s not in Porter County).
- At least $5 million a year from doubling Lake County’s innkeeper’s tax.
- Around $12 million from a 12% ticket tax on stadium events.
- Less than $16 million a year by diverting sales, income, and food and beverage taxes from an mega-TIF district containing the stadium and parking and training facilities.
- Up to $10 million a year from an omni-TIF district diverting property, income, and sales taxes from an area surrounding the stadium.
McCoppin says this adds up to a best-case scenario of $55 million a year in tax money; I get $61 million, but maybe I’m parsing things like “less than” differently that he does. Either way, Carroll projects that it’ll cost $60-62 million a year to pay off the $1 billion in stadium bonds Indiana is proposing — meaning any shortfall in tax revenue, and Indiana could be left having to scramble to raise additional taxes; state officials might want to talk to Cuyahoga County about how that’s worked out for them.
“If any of those assumptions fail to materialize,” [Carroll] wrote in an email to the Tribune, “the reality can drastically change the financial scenario.”…
“And what happens if the revenue falls short?” Carroll asked. “I assume that’s where the broader tax sources unrelated to the stadium come into play, which would increase the tax burden for Indiana residents.”
Finally, Carroll wondered, “What other events might draw the necessary crowds? And will enough people attend those events? These are really important questions considering there are only a handful of home football games each season.”
The stadium’s total cost, meanwhile, also remains a mystery, notes Propheter, and will depend on such unknowns as where exactly it would be built, how much would have to be paid to acquire land, and how much it would cost to maintain. And while he doesn’t mention it in this article, another huge TBD is the size of that omni-TIF district surrounding the stadium: Indiana’s legislative analyst previously declared the total tax diversion to be “indeterminable” given that the district could always be expanded to cannibalize taxes from a larger area, which is good if you’re worried about the state being able to pay its bills, bad if you’re worried about the state raiding its existing budget to do so.
All told, then, Indiana is proposing at least $1 billion in subsidies for a Bears stadium, but possibly more, and it’s unclear if the proposed tax package will be enough to pay for all that or if additional taxes will be needed. If Bears execs go for all that — which also remains a major unknown — it will be down to a new state stadium authority to decide on the specifics. “Approve stadium first, have an unelected body work out the details later” isn’t the ideal way to go about state economic policy, but it’s apparently the one Indiana has decided to roll with.